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HomeMy WebLinkAbout30393 / 79-26� A D D E N D U M Octobe.r 4, 1979 r 26 PURPQSE: PIAIVE BIAS At3D PUtt�[IASE SALT INITIFITED BY: CITY ADNANISTRAIION R�OT L7PION SE IT RESOL� by the Co�ron Council of the City of Osn;:�h that rhe proper City o£ficials aze hemby authorized and directed to waive bid.> and enter into the attacned Purchase Agree�nt and Escro.r Agree�nt, all �rtaining to the purchase of salt �or the 1979-1980 season fron I�source Economics Corporation, 1724 Shermzn Avenue, Evanston, IL 60201, to�oit: 1500 tons at $34.80 p�r ton. Nbney for this purpose is hereay appro�_iated fro:n Account No. 043-491, Snaa I�m�val Supplies. BE IT FUtZCEIER R�:SOLVED that the proper City ofiicials are hereby authorized and directed to transfer the s�n of $52,500.00 from Account No. 310-550, GenereQ FUnd }�uity, to Account No. 043-491, Snaa R_nnval Supplies; leav�ng a bala-�ce in Account No. 31U-550, Ger�ral Fund F�uity, of $19II,542.93. The Sum of $52,500.00 will be repaid from the 1980 Budget. "'.�is':..._.,-.:7 _. - 2 6 - , ESCROW ACREEMENT This Escrow Agreement (hereinafter referred to as the "Escrow Agree- ment") made and entered by and among RESOURCE ECONOMICS CORPORATION, an Illinois corporation (herein- after "Resource") and THE FIRST NATIONAL BANK OF CHICAGO (hereinafter sometimes "FNB"), as Escrowee. W I T N E S S E T H: That, WHEREAS, Resource is proposing to sell salt to various entities i"Buy- ers"), including without limitation, governmental units and municipalities; and WHEREAS, Resouree will acquire the salt from a third parties, which ac- quisition may require the use of letters of credit; and WHEREAS, the salt may be transported by a mode of transportation (inclu- ding, without limitation, ship) which requires that freight payment be made before unloading; and WHEREAS, Resource is requiring that Buyers pay the purchase price for the salt upon execution of a purchase a�reement betti.een Resource and Buyers; and WHEREAS, Resource wishes to assure buyers that their payments in advance will be held separately and applied to the purchase and transportation of the salt and related matters; and WHEREAS, Resource believes that an appropriate vehicle to accomplish its aforesaid goal is an escrow which will hold and distaurse the purchase price; and WHEREAS, Resource will have ar, agreement with each Buyer (in form and substance substantially the same as that form of Purchase Agreement (the "Salt Agreement") annexed hereto governing the purchase and sale of the salt (sometimes referred to in the Salt Agreement and hereinafter as "pro- duct") which will specifically set forth each Buyer's agreement to, joining in and becoming bound by this Escrow Agreement; and WHEREAS, Resource wishes The First National Bank of Chicago to be the Escrowee and The First National Bank of Chicago is willing to be the Es- crowee; NOW, THEREFORE, the parties hereto agree as follows: 1. DEPOSIT OF FUNDS (a) Deposit Pursuant to the Purchase Agreements between Resource and the sev- eral Buyers, eaeh Buyer shall deposit the contract price for its order of salt with Escrowee, and Escrowee shall accept such deposits and shall hold �� the funds so deposited subject to the terms and conditions hereof. Resource will deposit with Escrowee copies of the Salt Agreement with each Buyer. (b) Receipt of Deposits Upon receipt of funds from a Buyer, Escrowee shall deposit such funds in the escrow and shall advise the Buyer and Resource of the date and amount of the deposit and the identity of the depositing Buyer. If, on or before Oetober 19, 1979, Resource advises the Escrowee that Resource has sent Notices of Confirmation to the Buyers confirming the Suyers' orders of product, the Escrowee shall continue to hold such funds thereafter subject to the following provisions of this Escrow Agreement. If Resource does not advise the Escrowee of such confirmations by October 19, 1979, the Escrowee shall promptly thereafter refund such cash deposits to the Buyers who shall have made such deposits, together with earnings thereon, if any, less such Buyer's allocable portion of escrow fees and costs. 2. SEGREGATION OF FUNDS TO SECURE AND COVER PURCHASES BY RESOURCE, LETTERS Upon notice from the appropriate department of The First National Bank of Chicago or any issuing bank that a letter of,credit was issued upon the direction of Resource to support purchase of salt or upon notice from Re- source that it has plaeed a firm order fpr product not requiring a letter of credit, Escrowee shall segregate an amount of the escrow funds equal to the face amount of each s�ch letter of credit or the purchase price specified in such notice. All funds segregated pursuant to this Paragraph 2, at any time or from time to time, shall be known as "Segregated Funds"; such funds shall be, and shall be deemed to be, sec�rity for payment of the letters of credit. Such Segregated Funds shall not, under any circumstances, be sub- ject to withholding, lien, attachment or the like of or by any party or person, including, without limiting the generality of the foregoing, any Buyer asserting a claim of any nature whatsoeve^ there against, any entity from which Resource purchased product or any creditor of Resource. 3• DISBORSEMENT OF FUNDS AGAINST LETTER OF CREDIT OR PRODOCT PllRCHASE BY RESOURCE Upon written advice from the appropriate department of The First Nation- al Bank of Chicago or any issuing bank that a letter of credit ordered by Resource for the purchase of salt has been honored or upon written notice from Resource that payment is requir?d in conjunetion with any purchase of salt by Resource, Escrowee shall transfer or pay funds as designated in such advice or notice to cover and pay the amount of such letter of credit (plus the fees and chzrges in conjunction with issuance and payment thereof) or Resource's purchase price of salt, as is appropriate. The payment or trans- fer of funds with respect to any such letter of credit. or for the purchase of salt by Resource without a letter of credit shall be from the Segregated Funds if funds have been segregated in respect of such letter of credit or such purchase of salt; if there are no Segregated Funds with respect there- to, then the transfer shall be from any other funds in the escrow. 4. DZSBURSEMENT TO PAY FREZGHT Upon written notice from Resource that freight is due or will promptly become due for the transportation of salt, accompanied by a copy of an ocean bill of lading for such shipment, Escrowee shall disburse escrow funds in the amount indicated by Resource as necessary to pay the freight; such funds shall only be payable to the transporting entity as designated by Resource. Escrowee shall deliver to Resouree or to the transporting entity, as di- -3- rected by Resource, the funds in such form as Resource may request, inclu- ding, without limitation, cashier`s check, draft or the like, payable to the transporting entity or shall wire transfer such funds to the transporting entity. 5• DISBURSEMENTS TO RESOURCE (a) In General At such time that Escrowee shall disburse funds for transportation of salt pursuant to the foregoing Paragraph 4, Escrowee shall disburse to Resource the amount of $34.80 per ton of salt as disclosed on the ocean bill of lading required pursuant to Parzgraph 4, less the aggregate of (a) the amount paid for transportation of such salt, (b) the amount paid for (or re- maining in the Segregated Funds set aside for payment of) the letter of credit or purchase price for such salt, and (c) any disbursement with re- spect to such salt pursuant to the provisions of Paragraph 8 hereof. (b) Adjustments of Segre@ated Funds In the event of the cancellation, expira�ion or reduction of a let- te^ of credit, or if after payment from Segregated Funds for a letter of � credit or for the purchase of salt, Resource shall advise Escrowee in w^iting that the amount of such payment was less than the amount of funds segregated for sueh purpose, the Segregated Funds shall be reduced ac- cordingly and such excess funds shall be transferred to the unsegregated portion of the escrow. To the extent that disbursement has already been made to Resource pursuant to the foregoing Paragraph 5ia) with respect to the salt covered by such letter of credit or purchase price, the Escrowee shall promptly make a supplemental disbursement to Resource in an appro- priate amount. (c) Final Disbursement of Nonsegre�ated Fur,d Upon certi;ication by Resource to the Escrowee that all shipments o.` salt contracted for have been received and that ocean freight payments have been made, then all remaining nonsegregated funds shall be disbursed to Resource. 6. USE OF FUNDS Escrowee shall invest the ese^oM funds in U.S. Treasury obligations maturing not more than 60 days after purchase. The income earned on sueh investments shall be retained in the escrow for thirty i30) days after the last Unit Payment 'or until December 15, 1979, wh:�chever occurs fi�st. At such time Escrowee shall pay its own fees from such income and shall deliver the remainder of the income to Resource. As a condition to receiving the aforesaid income, Resource shall identify Buyers, if any, that have not re- ceived (or will not receive) all the salt for which they deposited funds in the escrow; each such Buyer shall receive its proportionate share of the in- come (after payment of Eserowee's fees) based upon the amount of salt it did not receive as compared to the aggregate amount of salt paid for through the escrow without regard to the date ot deposit of its funds. 7. SOLE P047ER OF DIRECTION I� F.ESOURCE Escrowee shall take and follow all instructions and directions permitted under this Escrow Agreement only from Resource and shall disregard and re- fuse to comply with instructions and directions .`rom any other person or en- tity except notices from issuing banks concerning issuance and honoring of letters of credit as contemplated by Para�raphs 2 and 3 hereof. Without -4- limiting the generality of the foregoing, Escrowee shall disregard and dis- honor all notices, demands, instructions, directions and the like £rom any Buyer (whether or not same relates to purchases, delivery or payments for salt), from any entity from which Resource purchases product or from any creditor of Resource, Resource may, but is not obligated or compelled to, direct Escrowee to issue repayments to Buyers of deposits with respect to whicy salt is not delivered. 8. INCIDENTALS Upon written request from Resouree, Escrowee shall make disbursements from unsegregated escrow funds to pay incidental and related costs and ex- penses in conjunetion with the purchase and transportation of salt for which funds have been deposited in the escrow. Such incidentals may include in- sur2nce premiums and any permit, license, docking, wharfage, hauling or simi�ar fees. TERMINATION ihe escrow and this Escrow Agreement shall terminate, be null and void, and 'nave no further effect after the distribution of the entire escrow fund pursuant to the terms hereof. Resource ma�, however, extend the term hereof if necessary or appropriate, in Resource's sole discretion, to effectuate sale of product and matters set forth in the Salt Agreements. MI���Yy.��]"1�1J (a) The First National Bank of Chicago shall be entitled to receive compensation for its services as Escrowee hereunder at its usual and custo- mary rate; FNB shall be entitled to additio�al compensation for any special or additional services it may render. Such compensation shall be paid from the ?ncome earned on the escrow funds; if such income is not sufficient, then Resource shall pay any additional amount due. In addition thereto, FNB shall be entitled to reimbursenent out of the escrow property for reasonable costc� expenses and attorneys' fees reasonably incurred by it with respect to tne escrow and if it shall be unable to reimburse itself from such pro- perty, Resource agrees to pay any sueh deficiency to the Bank on demand. (b) In case any property held by FNB hereunder shall be attached, gar- nished or levied upon under any order of court, or the delivery thereof sha11 be stayed or enjoined by any order of court, or any other order, judg- ment or decree shall be made or entered by any oourt affeeting such proper- ty, or any part thereof, or any act of FNB, it is hereby expressly author- ized in its sole discretion to obey and comply with all writs, orders, judg- ments or decrees so entered or issued, whether with or without jurisdiction, a�d in case FNB obeys and complies with any such writ, order, judgment or deerze it shall not be liable to any of the parties hereto, their succes- sors, heirs or personal representatives or to any other person, firm or cor- por2;ion, by reason of such complianee notwithstanding such writ, order, judgTent or decree be subsequently reversed, modified, annulled, set aside or vzcated. Notwithstanding the foregoing, at the request of Resource, FNB shal' appeal any such writ, order, judgment or decree and obtain such bonds or other security as may be required by such court to permit a stay of such writ, order, judgment or deeree pending disposition of such appeal, provided that. if, in the reasonable opinon of FNS, the property remaining in unsegre- gated funds in the escrow is insufficient to pay the cost of such bond and appe=_1 after giving due consideration to commitments which have theretofore beer. made for the cost of transportation of salt, Resource shall, promptly upor, demand by FNB, pay to FNB such additional amounts as may reasonably be requ?red for such appeal and bond. -5- (c) In taking any action hereunder, Escrowee shall be protected in relying upon any notice, paper or other document believed by it to be gen- uine or upon any evidence by it to be sufficient, and in no event shall be 1ia51e for any act or action performed or omitted to be performed by it her�,�nder in the absence of gross negligence or willful misconduct. (d) The First National Bank of Chicago hereby accepts the appointment and agrees to act as Escrowee under the terms and conditions of this Escrow Agreement. ll. NOTICES All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given upon delivery. If to Resource Economics Corporation: If to Escrowee: Resource Economics Corporation 1724 Sherman Avenue, Suite 4 Evanston, Illineis 60201 The First National Bank of Chicago Escrow/Trust Department, 8th Floor 126 South State Street Chicago, Illinois 60603 Attn: John R. Grimes iN WITNESS WHEREOF, the parties hereto set their hands and seals as of this First day of October, 1979, by their respective, duly constituted and aut^orized officers. RESOURCE ECONOMICS CORPORATION �, . _— � : � sy' .=,i-'�; t /:-f'r';'.� ,,t,l , <�.,,�`.y;� �:.. .. - i " �-�.. 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